Obama: Do a little tax, spending fix

Congress needs to give nation some breathing room, president says

New York Times

Updated 7:27 am, Wednesday, February 6, 2013

WASHINGTON — President Barack Obama on Tuesday called on lawmakers to quickly pass a package of limited spending cuts and tax changes that can head off the automatic, across-the-board reductions set to begin March 1.

Obama said Congress should delay the automatic cuts for a period of months to give lawmakers a chance to negotiate a full deficit reduction package that permanently resolves the threat of the so-called sequester.

"They should at least pass a smaller package of spending cuts and tax reforms" to put off the automatic cuts, Obama said from the White House briefing room, adding there is no reason to put at risk "the jobs of thousands of Americans."

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The president said the economy had begun to recover, but he warned that continuing clashes over taxes and spending threatened to delay or derail that improvement.

"We've also seen the effects that political dysfunction can have," Obama said. "We've made progress, and I still believe we can finish the job with a balanced mix of spending cuts and more tax reform."

Obama did not spell out a specific package of cuts and tax adjustments. In the past, he has said cuts in spending must be balanced by an effort to raise new tax revenue by closing loopholes for wealthy Americans and the oil and gas industries.

The president acknowledged that a broader budget agreement is unlikely to be reached by the March deadline, when the cuts to domestic and military programs will take effect.

Obama's remarks came at about the time the Congressional Budget Office released its annual economic report and its latest projection on the country's budget deficit.

The budget office, in its first analysis since the year-end tax deal between the White House and Congress raised taxes on high incomes, showed that the deficit for the fiscal year that ends Sept. 30 would be $845 billion, lower than the last four post-crisis years in which deficits exceeded more than $1 trillion.

That $845 billion difference between government receipts and spending would be equal to 5.3 percent of the nation's total output, or gross domestic product.

While the annual deficit is projected to decline as the economy recovers, the budget office once again emphasized that the deficit will rise later in the decade and continue to do so as the population ages and health care prices keep rising.